Parliamentary Sketch Writer for The Sydney Morning Herald

As Amanda Vanstone once famously asked: What can five bucks buy you anyway? Now the government appears to be considering a $5 or $6 fee for Medicare-funded doctor's visits, which have hitherto been free, it is worth reminding ourselves, with the fearless logic of the former family and community services minister, that such an amount is a piffling sum.

As Vanstone said back in 2003: ''Five dollars, hell, what will it buy you? A sandwich and a milkshake, if you're lucky. Not much.''

Vanstone was talking in the context of welfare payments. She argued that while it was heart-wrenching to hear impecunious people plead for just $5 more a week, in reality such an amount wouldn't go very far anyway.

It was fabulous political logic. If you're not broke, a sandwich and a milkshake qualifies as a snack you could dispense with with little hardship. But, to others, such a culinary combo easily qualifies as ''a meal'' - something that people on welfare, and many others besides, seem to attach great importance to.

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Vanstone's comments were controversial because, at the same time as she made them, treasurer Peter Costello was selling the tax cuts he had just handed out in his annual budget. The average tax cut per Australian worker? About $5 a week. Some interpreted her comments as a veiled jab at the Treasurer. Whatever the case, it was all very confusing - while average Australians were supposed to be thanking the fiscally responsible treasurer for giving them a shake-n-sandwich-sized bonus, his fellow minister was urging us not to sweat the small stuff.

As reported by the Herald this week, there are divergent opinions among healthcare experts and economists as to whether a $6 Medicare co-payment for bulk-billing services would be equitable or not.

Both sides of the debate seem to agree it will deter people (especially the poor people who generally use bulk-billing services, and therefore the ones this change would mostly affect) from going to the doctor too often. In other words, it will act as an effective price signal.

The most compelling argument I read against the fee is that while it will deter the poor from going to see their doctors as often, this won't save as much money as projected ($750 million over four years) because it's not the poor who see their doctors too much. It's the middle class.

As reported by Jonathan Swan on Wednesday, Professor John Glover, a public health expert from the University of Adelaide, has found that those in the poorest neighbourhoods are much more likely than the affluent to put off seeing their doctor because they can't afford to.

This makes intuitive sense. The more affluent you are, the more educated you are likely to be about your health, the benefits of preventive medicine and the perks you can claim on Medicare - everything from psychological counselling and obscure blood tests to Pap smears and eyelid-lifting for medical purposes.

Of course, the large majority of what we claim on Medicare has a public health benefit and any politician who tampers with Medicare does so at his or her own peril.

Australians pay reasonably high income tax, as well as the Medicare levy. In return, they expect free (or, at they very least, heavily subsidised) healthcare. Our Medicare system is a source of national pride and one of the things, along with gun control, that separates us from the occasional barbarism of the Americans.

Australians know they are lucky to have a subsidised healthcare system and the fact that its cost is blowing out is testament to its success and, in part, our affluence.

''Price signalling'' - the imposition of a fee to decrease demand for something which damages the economy or the public good - is something we will hear more and more about in years to come, as our problems of affluence worsen.

Price signalling generally works to combat over-consumption but politicians have contradictory attitudes towards it. While Labor was happy to embrace price signalling in the form of carbon pricing, the opposition seems not to like the Medicare co-payment idea.

The government, in general, and Prime Minister Tony Abbott, in particular, spent a large part of the past two years brandishing the carbon tax-enhanced electricity bills of ordinary Australians and barking about cost of living increases. Now the government appears to be floating an idea that would go straight to the bottom line of the budgets of those same ordinary Australians.

Alcohol-fuelled violence is a huge topic of debate in NSW and while the government seems willing to consider licensing and venue controls, hell will freeze over and many more will have their heads knocked into pavements before governments will consider, for example, setting a minimum price per unit of alcohol.

Before Christmas, The Economist, hardly a cheerleader for market manipulation or carefree taxation, published an approving editorial about Scottish legislation, which set the minimum unit price of booze to 50 pence (93¢). The newspaper reported that binge-drinking and alcohol-related violence are growing worldwide, even in countries such as Spain and France, which have historically had a functional, food-oriented and moderate drinking culture. The French even have a new phrase for binge drinking: beuverie express.

In 2008, then prime minister Kevin Rudd did introduce an ''alcopops'' tax to curb teen binge-drinking but, like so many other Labor policies, it was poorly thought through. It didn't work because young people just moved on to other, cheaper drinks, which only confirms what The Economist reports - that, when it comes to alcohol use, price rises cut consumption, particularly among young people, who tend to have less money.

The other affluence-borne problem of our age is, of course, obesity. Here, again, the overwhelming evidence is that price signalling would work to decrease it. Deborah Cohen, a scientist and author of the forthcoming book A Big Fat Crisis: The Hidden Forces Behind the Obesity Epidemic and How We Can End It, argues that Westerners are fatter than ever not because they don't exercise enough or because they lack access to fresh fruit and vegetables. It's because calorie-dense, nutrition-poor food is too cheap and available.

''Why do we eat more than we need? The simple answer: because we can,'' Cohen wrote in The Washington Post. ''At home and at restaurants, a dollar puts more calories on our plates than ever before.''

In other words, that same $5 goes further than Vanstone could ever have dreamed of - and that's not always a good thing. But don't expect politicians to give you a straight answer on whether a ''prawn'', as a $5 note is known in Australianish, is an unbearable price impost or a ''modest co-payment''. They can't make up their minds.

189 comments

It is estimated that between 40% and 60% of patients in hospital are there with preventable conditions. On purely financial grounds one would think that we would spend more money on preventative health measures but the reverse appears to be happening. I suspect this is because there are more photo opportunities for politicians standing next to patients hooked up to very expensive machines that go ping than standing next to the same people perfectly healthy. An ounce of prevention may be worth a pound of cure but not in politics.

Commenter

Tony McIntyre

Location

Lower Mitcham SA

Date and time

January 04, 2014, 7:49AM

Jacqueline, the title of your piece could have been: “The times, they are a changin”. Australia’s economic circumstances have changed – no one can simply hope the situation will improve without significant adjustments in government and public behaviour. All options should be on the table - regarding federal government spending and taxing. This week, Bob Hawke and Paul Keating urged the government to cut spending and repair the budget. You may remember that mandatory co-payments were introduced - and then scrapped by their government.Abbott's former health adviser Terry Barnes has suggested a $6 co-payment (in a submission to the commission of audit) – as a way to reduce unnecessary GP visits.Under the Australian Centre for Health Research proposal to save the budget $750 million over four years, pensioners and concession-card holders would be exempt and families allowed up to 12 bulk-billed visits before they started the co-payment. Labor has dubbed this a "sick tax".In 1986-87, the Hawke government made $5.5bn in budget savings, reversed growth in real outlays and reduced the size of government - equivalent to $30bn in today's terms. It is worth noting that, if the same savings made in the three budgets 1986-87 to 1988-89 were made today, the budget would return to surplus in two years.If the Hawke Labor government was able to cut government spending by the equivalent of $30bn in one budget, this Coalition government could match them (at least). Hockey's first budget in May will be a step on the path to returning to a surplus – and, quite possibly, cutting spending by at least as much as Keating did in 1986-87.How he does it will be the $30 billion question.

Hockey could just cut the private health insurance rebate and that would immediately cut $4 billion from our taxpayer funded costs. Then there's the mining subsidies of $4.5 billion a year. ADF planes being used as taxis to ferry ministers from the west coast to Canberra during sitting weeks at $55,000 an hour. Negative gearing and CGT concessions that cost upwards of $28 billion a year. Various corporate subsidies that cost. Middle class welfare that's costing billions. And then reintroduce a 50, 40, 30, 20, 10, income tax program and actually make the people earning over $1 million a year pay their fair share of tax while also making those earning $50,000 a year pay their fair share too. They could even increase the GST and put a super profits tax on every industry including the banks. Then it wouldn't matter how much pensions or education or healthcare cost because the money would be there to spend on it. All of that would bring the budget back into the black but the best initiative would be to reduce politicians wages, entitlements, and taxpayer funded pensions. In the 70s a backbencher was paid the same as a teacher. It's time they earned their keep or were paid their worth because with all the pay rises we've still got nothing more than monkeys feasting on gold plated peanuts hand fed from butlers with white gloves on in a palace built from ivory...

Commenter

John Michaels

Date and time

January 04, 2014, 9:46AM

For a mob that trumpeted "no excuses" along with "no surprises" there's a strange and daily dose of both. Well, I suppose like the lawyers that too many of them are, they didn't promise "no hypocrisy' and so allowed themselves a nice little loophole to match the 'core' and 'non core promises' rationale of their beloved, obfuscator in chief and congenital prevaricator, Jonny Howard. As self professed "political love child of Bronwyn Bishop and John Howard, Abbott is working hard to overtake his 'parents' benchmarks for duplicity and hypocrisy, aided and abetted by his cabal of similarly mediocre and excuse ridden colleagues.

Commenter

Warwick

Date and time

January 04, 2014, 10:07AM

John MichaelsA rebate is not something the government pays out to the taxpayer. Therefore, it doesn't cost the government anything.Same with negative gearing. If you're going to tax me on the income I earn then I better be able to deduct the outgoings I incur in earning that income. Saying that I offset it against other forms of income is unfair is also wrong. Every dollar I earn is subject to tax so every dollar I spend in earning that income better be deductible.CGT is also another example of the government sticking their hands into everything I do. I paid tax on the money I earned to be able to turn around and invest it and then they tax me again when that investment increases in value and I sell it. Very few countries bother with a CGT. Then the government tells me I have to invest to fund my own retirement. Highly contradictory.What exactly is "super-profits". Seems another vague notion to get hands on other people's money.How about just cut all useless expenditure. Baby bonuses. FHOGs. PPLs. FTB As and Bs. Privatise sectors that can easily be privatised: highways, electricity, water, education and health being prime examples. Reduce the size of the public service and make the remaining ones work the same way those of us in the private sector work (12-16 hour days and often on weekends, too). The less the government needs to spend the less it needs to collect.

Totally agree. They don't have to 'overhaul' Medicare - it is being deliberately targeted and gutted for ideological reasons. Touch Medicare Mr Abbott and you'll be out on you ear very shortly. Haven't you kept tabs on public comments over the last week? (The best you could do would be to increase it by 1 per cent. That's all.)

Commenter

Cranky

Date and time

January 04, 2014, 10:25AM

Do not go there Abbott. You messed up everything when you were Health Minister, and now you want to do it again?Election now - I have NO CONFIDENCE IN THIS GOVERNMENT.

Commenter

Jan

Date and time

January 04, 2014, 10:29AM

Everyone has been blinded by new borrowing of several hundred billion dollars, even the media missed its huge significance, and pre-election everyone were worrying about a 15 billion deficit, but so quiet on greens and lib deal to borrow a huge several hundred billion with no purpose accounted for it. How do we repay several hundred billion and they will borrow same extra amount every term. Yes folks you are about to find out when too late, yes huge tax rises, service cuts and welfare cuts to even meet partial repayments and this new doctor fee is just your first taste. Jobs disappearing, businesses closing or going off-shore, huge rises in taxes services and utilities coming, many bordering on mortgage failure, many unable to afford rent, and no government economy plans evident other than borrow money rather than fix economic issues. MARK MY WORDS

Commenter

Brian woods CHISHOLM

Date and time

January 04, 2014, 10:37AM

Howe, it will be interesting to see if Hawke and Keating will support spending cuts after they are made or will they revert to form? JM, the saving of $4billion would end up costing significantly more in increased public health costs. Everyone would miss out. Is that the progressive objective? Instead of giving the rich a 5% benefit and the poor a 10% benefit, progressives would prefer everybody get nothing than the rich get a small benefit.